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Speciality Fashion chief remains cautious

Specialty Fashion's sales are up for the start of fiscal 2013, but the retailer's chief executive Gary Perlstein says shoppers are too fickle for him to predict improved trading conditions.

Mr Perlstein told the company's annual general meeting on Thursday that trading since July had been encouraging with gross margin improvements and single digit comparable sales growth after a disappointing 2011/12.

Specialty Fashion sales were up only 0.4 per cent for the year to June 30 which in turn resulted in earnings before interest tax, depreciation and amortisation (EBITDA) of $21.7 million and an after tax loss of $2.8 million.

Mr Perlstein said while the sales growth was welcome it was too early to predict a turnaround in consumer confidence.

"Despite these positive signs, we remain cautious with the all important Christmas period still to come," he told shareholders in Sydney.

"We remain of the view that consumers are fickle, and susceptible to becoming more cautious if there are any economic or political shocks that occur in the near term.

"Given the importance of the next two months trade to our business, we are unable to provide guidance of either sales or profit for the first half at this stage."

Chairman Geoff Levy said Specialty Fashion opened 29 stores and closed 27 during 2011/12 and expected to close more during the current financial year.

"We will continue to review our store portfolio with a view to improving performance," he said.

Mr Levy said the company would also be working on reducing the cost of its product by increasing the proportion it sourced directly from factories in Asia.

"Because we work directly with the factories, we have greater negotiating leverage, and improved pricing transparency," he said.

Specialty Fashion shares were up 3.5 cents, or 6.19 per cent, to 60 cents at 1523 AEDT.